. >> the governor unveiled his new spending plan and welcome news for education. nannette miranda is live in sacramento with more on this for us. >> reporter: if you look at just the state's general fund, things do look rosier but it doesn't account for the big debt that california has to pay back but the governor sees this as great progress. >> over here.... >> he says the budget deficit has been wiped out. and spending in kindergarten through 12th great will go up $2700 under a controversial proposal to give schools more money. >> growing up in richmond is not like it is growing up in los gatos or piedmont. >> higher education will see a bump of $2,000 per student in the same time period. all thanks to resounding economy and california voters for approving the tax hike under proposition 30 last november. >> they voted for the tax measure, we're putting money into schools as i said, but we're not going to play the game of spending money we don't have. >> reporter: in fact the $98 billion budget plan includes a billion dollar rainy day fund. proposal also drew cau